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NGN drivers and impact
NGN is an evolutionary process and it can be expected that operators will take different migratory
paths, switching to NGN while gradually phasing out existing circuit networks, or building a fully-IP
enabled network from the outset.
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The investment in developing NGN is motivated by several factors
(Table 2). Telecommunication operators across the OECD have been faced with a decline in the number of
fixed-line telephone subscribers, coupled with a decrease in average revenue per user (ARPU), as a result
of competition from mobile and broadband services.
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Traditional sources of revenue (voice
communications) have declined rapidly and fixed-lines operators are subject to an increase in competitive
pressure in the market to lower tariffs and offer innovative services. This has generated pressure from the
investors’ community to decrease the cost and complexity of managing multiple legacy networks, by
disinvesting from non-core assets and reducing operational and capital expenses.
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